HCA Shares Plunge After Profit Falls 22% as Surgeries Slow

Hospital operator HCA Holdings Inc said quarterly profit and revenue fell short of expectations because of a decline in complex surgical cases performed at its facilities, sending shares down 15 percent.

Demand for cardiovascular, neurological and joint procedures was softer than expected, HCA executives said Monday on a conference call.

"The market is concerned that this is the start of a trend, as opposed to one data point," said CRT Capital Group analyst Sheryl Skolnick.

Hospitals have struggled in the recession as Americans who lost their jobs and health insurance have avoided medical care.

"HCA reported disappointing results this morning, which serves as a harbinger of bad things to come for the hospitals this quarter," Jefferies analyst Arthur Henderson said in a note to clients.

HCA executives on the call said it was unclear yet whether overall market demand had slumped or the company had lost share, noting its patient trends had been favorable for the past several quarters.

HCA, the largest U.S. hospital operator that went public in March, said same-facility admissions rose 1.8 percent, as a 3.7 percent rise in medical admissions offset a 1.6 percent decline in surgical admissions. Emergency room visits increased 4.5 percent on a same-facility basis.

Second-quarter net income fell to $229 million, or 43 cents per share, from $293 million, or 67 cents per share, a year earlier.

Excluding items, earnings of 51 cents per share were 8 cents below the average estimate of analysts, according to Thomson Reuters I/B/E/S.

"While the company had favorable admissions growth during the quarter, we experienced a shift in service mix from more complex surgical cases to less acute medical cases," HCA Chief Executive Officer Richard Bracken said in a statement. "This resulted in lower than anticipated revenue growth and earnings."

Hospital operator HCA Holdings Inc said quarterly profit and revenue fell short of expectations because of a decline in complex surgical cases performed at its facilities, sending shares down 15 percent.
Demand for cardiovascular, neurological and joint procedures was...